Third Circuit Determines Party Seeking Removal Under CAFA Has the Burden to Prove Amount in Controversy

Per Morgan v. Gay, --- F.3d ----, 2006 WL 3692552 (3rd Cir. Dec. 15, 2006):

The first issue we address is whether the District Court properly placed the burden of proof on the defendants to establish federal subject matter jurisdiction under CAFA. The defendants concede that CAFA is silent as to which party bears the burden of proof on the amount in controversy. In an attempt to convince this Court that the burden to establish the amount in controversy falls upon the plaintiff rather than themselves, the defendants focus on the legislative history of CAFA as opposed to the text of the statute.

. . .

The text of CAFA does not explicitly address whether it shifts this burden to the party seeking to keep the class action in state court. The Seventh Circuit was the first court of appeals to confront this issue. Writing for a unanimous panel, Judge Easterbrook went so far as to state that "none [of the statute's language] is even arguably relevant" to the burden-shifting inquiry. Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005). The problem with relying solely on CAFA's legislative history is that the portion that supports burden-shifting "does not concern any text in the bill that eventually became law."

The only section of CAFA that might be applicable to this debate is its "Findings and Purposes," which broadly indicates an intent by Congress to make federal courts more available to class action litigants. However, the Findings and Purposes say nothing about burden-shifting, and should not be taken by this Court as an indication that Congress intended to shift a long-and well-established burden. See Miedema, 450 F.3d at 1329-30 (rejecting the Findings and Purposes for similar reasons). It should take more than a few lines in a Senate Judiciary Committee Report and some vague language in a statute's "Findings and Purposes" section to reverse the well-established proposition that the party seeking removal carries the jurisdiction-proving burden. Second, and related, as a general matter this Court need not look to legislative history at all when the text of the statute is unambiguous and there is no indication that Congress, for example, made a typographical error in drafting this part of the statute. Cf. Morgan v. Gay, 466 F.3d at 279 (stating that, where the "uncontested intent of Congress" shows that the statute contains a typographical error, the court's duty is to make a "common sense revision" to the text of the statute).

While several district courts have shifted the burden from the party seeking removal, no appellate court to date has done so. In addition to the aforementioned Seventh and Eleventh Circuits (in Brill and Miedema, respectively), the Ninth Circuit has also held that the burden remains with the party seeking removal. See Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676 (9th Cir.2006) (per curiam). We see no reason to create an exception for CAFA to the well-settled practice in removal actions. Accordingly, we join our sister courts of appeals. Under CAFA, the party seeking to remove the case to federal court bears the burden to establish that the amount in controversy requirement is satisfied.